Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Multiple-Product Break-even Polaris Inc. manufactures two types of metal stampings for the automobile industry: door handles and trim kits. Fixed cost equals $146,000. Each door

image text in transcribed

Multiple-Product Break-even Polaris Inc. manufactures two types of metal stampings for the automobile industry: door handles and trim kits. Fixed cost equals $146,000. Each door handle sells for $12 and has variable cost of $9; each trim kit sells for $8 and has variable cost of $5 Required: 1. What are the contribution margin per unit and the contribution margin ratio for door handles and for trim kits? Round the ratios to three decimal places. Door Handles Trim Kits Contribution margin per unit Contribution margin ratio 2. If Polaris sells 20,000 door handles and 40,000 trim kits, what is the operating income? 3. How many door handles and how many trim kits must be sold for Polaris to break even based on the sales Door handles Trim kits 4. Conceptual Connection: Assume that Polaris has the opportunity to rearrange its plant to produce only trim kits. If this is done, fixed costs will decrease by $35,000, and 70,000 trim kits can be produced and sold. Is this a good idea? provided in requirement 2? units units ,operating income is

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Information For Decision Making Readings In Cost And Managerial Accounting

Authors: Alfred Rappaport

2nd Edition

0134643887, 978-0134643885

More Books

Students also viewed these Accounting questions